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Posts Tagged ‘Hydraulic fracturing’

Boom CoverEver wanted to ask a fracking expert a question? Now’s your chance. As in: right now.

Today, Wall Street Journal senior energy reporter and author of The Boom: How Fracking Ignited the American Energy Revolution and Changed the World Russell Gold is hosting an ‘Ask Me Anything’ on Reddit. You can connect with him here.

While the archive should remain active for a little while, these ‘Ask Me Anything” opportunities only last for a day… or until the participant gets fried by e-wave upon e-wave of questioning — note: it’s usually the latter.

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Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

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Vortex Tools covers changes in oil and gas litigation and education efforts in Colorado.

The Colorado Oil and Gas Association (COGA) hosts a monthly ambassador series. The goal is to help educate the public on a number of oil and gas issues.

Overall, pro-oil and gas people are really stepping up their public messaging in Colorado for a couple of reasons:

  1. Colorado is largely seen as a purple state turning blue: Translation: Large key cities like Boulder, Denver and Fort Collins have become more liberal over the past 10 years, changing the political climate of what once was a largely conservative state. Currently, Democrats are likelier to be opposed to oil and gas than Republicans.
  2. Moratoriums and bans on fracking are passing in meaningful places: When Boulder banned fracking, much like Vermont’s ban, I considered it equivalent to a landlocked state banning the ocean, because they don’t have any oil and gas production, but now places with production are starting to see those legal moves, too. As mentioned last time, Colorado now has the most stringent air quality regulations in the nation.

As a result, Coloradans for Responsible Energy Development (CRED) are running TV ads on fracking facts, and overall, the oil and gas industry is realizing that if they don’t start speaking up (from a perspective other than that of large, multinational oil and gas companies), decisions will be based on info from just one side. As is, the pro oil and gas crowd is launching lawsuits against what they view as illegal methods in passing recent bans and moratoriums.

(The legal route may have a negative connotation to it, but both those for and against oil and gas use the legal system. I’ve seen the public step-by-step tactics to get fracking banned in a town—banning fracking basically shuts down the oil and gas industry—and while it isn’t pretty, it is effective.)

Beyond that, the pro side of oil and gas is trying to humanize the issue in a couple of ways:

  1. In understanding the concerns of the Average Joe: Most people have some reservations about oil and gas, especially when it comes to drilling near their home. It’s a fair and understandable concern, one that the oil and gas industry up until lately hasn’t valued. Part of that stems from a ‘you don’t understand’ mentality, but the oil and gas industry didn’t necessarily understand that ill-informed people vote to pass laws all the time, so even if you think someone doesn’t really know what they’re talking about on an issue, their vote carries the same weight. Now that this is starting to click, there’s a greater effort to share pro-oil and gas education.
  2. In humanizing the oil and gas industry: One debate tactic I don’t like is making caricatures of the opposition, because if they’re not real people, you don’t have to care. The oil and gas industry is often viewed as a bunch of tobacca-spittin’ fat cats who long for greater profits over safety. Sometimes they don’t even get that far and it’s a faceless industry designed to squash and ignore the rights of the common people.

As a result, the COGA ambassador series is equipping and encouraging people to identify themselves as workers in the oil and gas industry.

Note that I, for one, do not chew tobacco and/or go out of my way to put your health at risk (though admittedly, there’s a small part of me that hopes that one day I can pull off Jesse Ventura’s look in “Predator”).

Point #2—humanizing the oil and gas industry—is key, especially when people realize that jobs are at stake when cities start crippling the oil and gas industry (by banning fracking, etc.) COGA estimates that 7-9% of Colorado jobs are related to oil and gas. Even with Colorado unemployment rates dropping to 6.2% in January 2014 (when it was 7%+ in 2013), for many people, it’s understood—especially as the job rates issue has gone on for so long and the statistics are often lower than the reality—that you don’t mess with job security.

It’ll be interesting to see how Colorado evolves throughout the year.

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Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

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Vortex Tools covers Colorado becoming the first state to control methane emissions at oil and gas sites, as well as noting its solution to help keep oil and gas companies in compliance with more stringent air quality standards. 

The Colorado Air Quality Commission just passed the strictest oil and gas air regulation issues in the nation, as they are the first to directly address and regulate emissions of methane gas (which is linked to climate change). For some, this is an overdue environmental necessity. For others, it’s one more attempt to shut down oil and gas production under the guise of purely health and environmental motivations.

Gov Hickenlooper (colorado.gov)

Gov Hickenlooper (colorado.gov)

After four days of hearings, on February 23rd, the state Air Quality Control Commission (AQCC) passed the motion by a vote of 8-1. They did so with support from Governor John Hickenlooper, environmental groups, and three large oil and gas operators — Anadarko, EnCana, and Noble Energy — along with Colorado’s largest natural gas gathering/processing company, DCP Midstream.

However, several smaller oil and gas companies, along with the Colorado Oil and Gas Association (COGA) and the Colorado Petroleum Association (CPA), opposed the far-reaching aspects of the regulations. COGA spokesman Doug Flanders noted, “Unfortunately, we were not successful in ensuring that the rule accommodates the differences in basins and operators. Nevertheless, we are committed to working with our operators, our communities and the state to successfully and effectively implement these rules.”

According to the Denver Business Journal, “State officials have pegged compliance costs at about $42.5 million a year, or less than $500 per ton of pollution eliminated. Executives at some of the Colorado’s biggest oil and gas companies have said the state’s estimate is in line with their estimates and a cost they consider acceptable.”

Funny thing about estimates that occur before regulations go into effect: they often fall woefully short once the laws of supply and demand kick in. If you must fix something to avoid fines (and yes, avoid damaging the environment), no one is surprised when the cost of fixing that requirement goes way up.

In addition:

The new operations standards are expected to remove from the air about 93,500 tons per day of volatile organic compounds (VOCs), which can cook into ozone on hot, sunny days, state officials have said.

They’re also expected to cut methane leaks by about 65,000 tons per year, with the methane — a strong greenhouse gas — captured and redirected into pipelines bound for markets.

Methane: harmful even when not coming from the backside of a cow

Methane: harmful even when not coming from the backside of a cow

So how are these rules different?

1. The regulations affect all of Colorado

This is something oil and gas proponents don’t like because different areas can have different issues, so a blanket approach not only takes the power away from the individual counties to make their own decisions, but can potentially apply standards that don’t make sense to that area. Like an omnibus or a comprehensive reform bill, some things get over-regulated, where other things aren’t regulated enough. In addition, these sweeping decisions can also be viewed as a state power grab over what should be an ongoing area-by-area conversation. For example, attempts to ban fracking in Colorado went after a statewide approach, got shot down, and returned as county-by-county initiatives (with some successes, some failures).

However, understand this: Similar to how a ban on fracking essentially shuts down oil and gas production, over-regulating methane emissions in producing oil and gas wells can do the same thing. For activists opposed to oil and gas, this is simply a greater victory, but the Average Joe voter may not be aware of all the damaging effects of this sweeping move, especially to the local economy and jobs.

2. The regulations require routine checks for leaks

This makes sense. If equipment is malfunctioning or something needs to be repaired (because it’s not doing what it’s designed to do), it should be fixed. Regulators can check up to once a month and any issue needs to be resolved in 15 days or the company faces ongoing fines.

I’ve been to enough oil and gas conferences to where I’ve heard repeatedly that oil and gas companies state they’re not opposed to regulation, just bad regulation. A lot of the larger companies — like the four above — are stepping out ahead of regulations to embrace these changes. Many of them now realize that the concerns of the Average Joe towards oil and gas are important (even if those concerns are shaped by misinformation supplied by activists opposed to this energy industry). This should be an obvious understanding, but it’s only recently, with some fracking bans succeeding, that valuing these concerns has increased.

But why are these big four on the opposite side of a lot of the smaller companies? Part of it is innovation. I saw a presentation from XTO Energy where they were detailing changes to their standards to improve wildlife protection. They weren’t being forced; it seemed like an “everybody wins” business practice. However, these larger companies can also afford to take a slight hit in Colorado if it helps their PR elsewhere. Noble Energy I’m unsure on; they’re fairly committed to Colorado, but the last time strong oil and gas regulations showed up in Colorado, EnCana slashed their state budget to 10% of what it was the year before. If EnCana pulls back again, they still have a global business to work with, but Colorado takes a hit on the jobs they no longer provide, and the smaller oil and gas companies take a hit due to increased costs.

 3. The regulations specifically target methane

Prior legislation only regulated volatile organic compounds (VOCs). When referring to oil and gas emissions, VOCs typically mean harmful gases and vapors. Previously, no other state has regulated methane, as it’d be difficult to enforce throughout the oil and gas chain. Which brings us to the next point:

4. The regulations include the entire natural gas chain

This includes “the well site, storage tanks, gathering lines and compression stations as well as processing plants.”

I’m all for preventing methane issues — especially in leaking and abandoned wells that should have their environmentally negligent issues addressed — but there are ongoing production areas that will become an issue. I mentioned above that methane regulation would be difficult to enforce throughout the entire chain. It’s not tough to enforce because the EPA doesn’t have the means — they have infrared cameras on helicopters to fly over and fine with ease — it’s tough to enforce because so many parts of producing wells have problems that stem from moving gas, especially with the 95% compliance rate they’ve set.

Natural gas is hard to control. It’s not like you can just grab it in scoops and stick it a giant zip lock bag that’ll never leak, and once it’s loose, there is no amazing net to swat over this loose natural gas to reel it back in.

As with many issues in the oil and gas industry, solutions shift once the existing solution is regulated away.

Vortex Tools has a solution to vented methane emissions at the well site. As with VOCs, the Vortex tool spins the flow of oil, gas, water, and natural gas liquids. By doing so, much of what would be fugitive vapors are converted to liquids and not allowed to escape at the culprit atmospheric release points. This allows operators to remain in compliance with EPA air standards (customer data shows negligible vapors at the well site, even at 103-degree F ambient daytime temperatures) and recover more valuable oil, condensate, and natural gas liquids to boot.

Vortex vapor recovery tool

Vortex vapor recovery tool

For more info on this application, email me at colin (at) vortextools (dot) com.

Of course, the largest sources of methane emissions still belong to termites and volcanoes, but bugs, exploding lava, and giant smoke clouds don’t listen to regulations. Maybe we’ll work on a solution to them next.

For now, it will be interesting to see if other states follow the standards set here or if it’s simply a Colorado-only effect for all the good and bad these regulations can bring.

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Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

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Vortex Tools looks at how the polar vortex might lead to a propane shortage.

Ladies and gentlemen, we’ve found our environmental boogieman of 2014: the polar vortex.

It’s been blamed for enough things that I might as well frame it for me slacking on blog updates, too, but when it comes to your heating bill, you don’t need to be conspiracy minded to understand that the colder it is, the higher your heating bill is likelier to be. Well, what happens when we take record low temperatures, limited supply of natural gas, increased demand, and expand the issue nationwide?

Well, this:

Source: OPIS

Source: OPIS

Sure, it looks like a couple of squiggly lines showing the ups and downs on the value of propane and ethane over the last few years until… oh my, is that 2014—as in, now, today—on the far right?

Yes it is, and the skew is far from over considering there are many months of cold weather to come.

Here’s what this means:

Propane is a popular heating fuel. With temperatures being so low, demand has doubled… then doubled again. Hence why that line is going straight up. An acquaintance called a local propane dealer three days apart—the price went up 112% in that time and the quote was only guaranteed for one lone hour.

Ethane, however, is now viewed as a problem fuel, because you can’t burn ethane in a propane heater (you can use butane, but you need a different burner). It’s now worth ($0.50)/gallon—as in minus fifty-cents a gallon. You actually have to pay someone to take it away. Or you burn it—which is pretty much the oil and gas solution to unwanted gas (and natural gas liquid) issues. It’s part of the reason why the Bakken looks like a lit-up city from space.

(Regulations haven’t gone into effect against flaring/burning gas yet, but overall, some think these issues may be good for gas prices as they’ve been depressed for so long.)

However, if there is another cold spell, there could be a natural gas shortage, and that’s with the increased supply enabled by fracking. In addition to the jobs squeeze, this propane issue may make those cities that banned fracking regret their decision.

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Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

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Vortex Tools discusses the idea of taxing states that benefit from technological breakthroughs in oil and gas (namely hydraulic fracturing/fracking) while limiting its use.

A few months back, I mentioned that Fort Collins, Colorado, was considering a five-year moratorium on fracking (initiative 2A). Well, in November, 2A passed and the ban is on. Unlike Vermont’s fracking ban—which was akin to a land-locked state making rules against the ocean—Colorado actually has oil and gas operations to hinder, and these moratoriums against fracking bring new complications.

We live in a meme culture where people attempt (and fail) to summarize complicated issues with a picture and an oft-scathing caption. Take this Twitter pic for example:

Twitter anti-fracking labels pic

It’s actually pretty funny—noting how this protestor’s camp gear was essentially enabled by oil and gas production (same goes for your smart phone, FYI)—but there are several fracking issues that are actually concerning: For example, the amount of water used in fracking. Some put that average at 3-5 million gallons per frack job. Multiply that by the number of wells drilled in a year and that’s hundreds of billions of gallons of water annually. Up until recently, the produced water from these frack jobs was largely not being reused (though innovative companies are starting to change). It got pumped back down and stored underground.

With our sister company, SpiroFlo, working in both water savings and water purification applications, we know the specifics of how wrong this approach is, but you don’t need to be an expert to realize that, with a water shortage looming in 2020, this—and frankly, a lot of our residential water use practices—are unsustainable.

I’ve noted before that many fracking issues are not about good science (along with valid reasons why oil and gas companies are hesitant to own up to mistakes), but there are parts of the fracking practice that need to change. I’ve been to enough oil and gas conferences to know that the industry isn’t opposed to regulation, just bad regulation. That may sound like a good public talking point, but the anti-fracking group has its own questionable statements.

I hear people talk about potential alternate energy use (read: absolute best case scenario / rabid fantasy for wind power and solar) as if it could replace oil and gas today. Others say they want to ban fracking, but won’t own up to wanting to ban oil and gas use, period. Many of them don’t know that a ban on fracking is essentially a ban on oil and gas in today’s world (some do and don’t want to publicly admit it).

And what about cities and states that want to ban fracking? What are the consequences for them? Right now, there aren’t really any. A co-worker of mine has over 30 years in the oil and gas industry. He’s seen a lot of what works and a lot of what doesn’t. His idea is to tax cities and states than ban fracking, because they’re hindering energy growth (along with bringing back up all those foreign oil dependency issues people don’t like) while benefitting from the energy-reduction perks that stem from these technological breakthroughs. Shouldn’t there be a cost to that?

According to recent polling, most New Yorkers are opposed to fracking. While the percentage of that majority can vary, on the opposite side, most of these same New Yorkers have embraced lower heating bills thanks to an abundance of cheaper natural gas from widely fracked areas like the Marcellus Shale.

Maybe you’ve noticed cheaper gasoline at the pump in 2013. In part, you can blame fracking for that, too.

Overall, there’s a need to educate people on both the pros and cons of fracking (and the practices of the oil and gas industry as a whole). It’s not a quick and easy debate, and part of the responsibility falls on the debaters themselves.

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Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

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CSU went with a ram — the most fearsome of mascots

Vortex Tools talks about the Natural Gas Symposium and how the Colorado flood affected oil spills in the area.

This week I attended the Natural Gas Symposium at Colorado State University in Fort Collins.

It was a bit of an odd crowd—there was a table full of anti-fracking retirees (especially as there’s a moratorium, Fort Collins Initiative 2A, to ban fracking for five years this November), a slew of locals who attend everything, then larger companies and politicians.

I should say former politician, singular, as several were stuck in DC with the partial government shutdown. In fact, a government worker told me that with the shutdown, government holidays go away, too, so if the shutdown had gone on, they would’ve been required to show up to work on Thanksgiving and Christmas.

Anyway, former Colorado Governor Bill Ritter, now that he’s retired (and I’m guessing paid per appearance), is everywhere these days, but he opened up the Symposium—read: a fancy word for a series of 75-minute speaker panels—with a discussion with the CEO of General Electric and the CEO of Noble Energy. Pretty fancy for a free conference.

I’ve had a couple of posts on the Colorado flood lately—how it didn’t help drought levels and how the oil and gas industry seems to be unfairly targeted in catastrophe situations—but I heard an interesting comment at the Symposium: one of the speakers noted that, with the deluge of water, the oil from damaged wells was essentially washed away.

It’s kind of like filling up a tenth of a glass with grape juice, then running it under a faucet. It doesn’t take long for the juice to dilute out. Sure, oil has more impact than grape juice, there isn’t a sink drain in nature, and maybe you’ve even heard that good ol’ notion that oil and water don’t mix—it isn’t just a metaphor, people—but right now, a) there are larger issues to address in the aftermath of the flood; and b) we’re stuck waiting for most of the oil to show up to treat… if it does.

However, I think the flood damage, coupled with the negative impression people have of oil and gas in Colorado, could lead to the fracking ban passing in November.

Let me be clear: I don’t like everything about fracking, and I don’t think it will exist in its current form in five years, but if you completely ban the practice, you basically shut down new oil and gas activity. While there are plenty who are happy with this notion, they’ll be surprised at the huge hit to the local economy. One Fort Collins council member went so far as to say that anyone who signs their name to the fracking ban should put up x amount to cover the financial loss. Meanwhile, the oil and gas industry will just move their operations to other states until it switches back.

Good luck getting the rest of the states to do the same, by the way. Call me crazy, but they might even welcome the revenues that Colorado would shoo away by passing 2A.

I think there’s a need to curb some of the energy use of fracking—especially as the industry is not required to reuse all that fracking water they then pump underground—but let’s talk compromise rather than local industry amputation.

A common statement I heard is that the oil and gas industry is not opposed to regulation, just bad regulation. Good regulation is necessary for safety, and when there isn’t enough, you get the kind of political move we’re seeing coming now.

However it goes, we’ll get a prediction of what 2014 will look like for Colorado oil and gas in November.

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Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

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By United States Senate [Public domain], via Wikimedia CommonsVortex Tools explains why the latest trends in environmentalism have little sway.

I realize my interest in environmental regulations news has waned.

I know, it’s not something most people would pick to be interested in to start with, but given I work in the water and oil & gas industries, this type of thing has at least somewhat of a foothold in my worldview.

So take President Obama’s recent environmental speech. I thought about blogging live reactions and ramifications. I thought about spoofing a mock drinking game based on overused environmental buzzwords (but then figured I might get someone killed from alcohol poisoning). I thought about doing a lot of things to respond in the moment, but I didn’t, and here’s why:

  1. Political parties often determine environmental policy: Like it or not, there’s a reason why people largely vote along party lines, not for individuals. Majority determines policy, and based on who’s controlling what, I know what I’m getting without having to hear the latest promises.
  2. If you want to know what a politician will do, check their voting/implementation/funding record: This ties back to #1, but you can monitor the individual over time. It’s hard to find a list without some form of spin on it, or with enough context to make sense as is, but you can get a good feel for what a politician favors and opposes.
  3. Passing environmental law =/= a change in reality: Again, look at the history. Heavily subsidized companies fail (sometimes without a workable product—the kind of thing you figured would be researched before handing them millions of dollars); laws get passed on green alternatives that no one can meet even if they wanted to do so; then agendas/political party power changes and so do the laws.

In short: Whether by statement or legal implementation, the latest environmental intent doesn’t mean anything.

So all these views about what this politician meant by x, what this latest movie/study on climate change/fracking/whatever-hot-button-issue-it-is-this-week, and any other environmental niche you can debate all day—take electrical power from potatoes; I’m begging you: please take on the electrical power from potatoes mantra—it’s all for naught.

It also doesn’t help that all this analysis, theory mongering, and strategizing get trumped by that thing called ongoing reality.

I suppose that’s a sad thing to say for a fella like me who likes to follow and comment on this bent, but it’s not like I wasn’t a cynic before…

Do I believe that enough little changes over a long enough timeline can change the big picture? Certainly, but I think that the change count and timeline is far higher and longer than even the most hopeful want to admit. But hey, I’m just one voice among many. This is the information age, which means everyone has the right be misinformed.

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Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home) and industrial water purification (biofilm removal).

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, etc.) and safe movement of materials (including potash and soda ash).

Read Full Post »

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